AMAZON

• What are the key success factors at Amazon related to operations management

  1. efficient delivery, popular with customers, no wait
  2. offer low prices -> access to stock, buy in bulk
  3. have everything
  4. good customer services
  5. humans to help robots -> efficient, make rate make employees motivated combination of in house + outhouse service
  6. data to predict customer buying patters
• What is the Cheetah and Gazelle concept and how does it apply to Amazon

  1. Amazon targets the weakest vendor, offers goods deals
  2. they makes a profit off them
  3. then Amazon changes the terms of agreement
  4. Gazelle aka vendors are locked in and dependent on Amazon
  5. if gazelle performs poorly of something happens they move on to the next vendor
• What strategic decisions did Amazon make that have made them successful

  1. Amazon prime, prime video, sunk cost fallacy, buy stuff, more value, if use more
  2. offers discount
  3. changes prices often to match market
  4. prime day
  5. return policy is very generous - builds customer loyalty, keeps you buying more, customer for life
  6. fulfillment centers around the work - making it faster
  7. delivery is not cheap but Amazon is very efficient, lost money for two years, kept investors confident, cross subsidized with e commerce site
  8. partnered with cities , lost money = less taxes
• Discuss the use of big data and data analytics at Amazon

  1. deciding what to display on the homepage
  2. using data from what the customer buys
  3. SHIPPING ORDER
  4. frequently bought together
  5. Amazon go store - data on what you pick up and what you put back
• Amazon was recently charged by the EU in an antitrust lawsuit. Should Canada do it do

  1. competitive act
  2. Shouldn't: heavily rely on them, satisfied customers, competitive prices, change prices accordingly
  3. Should: if formed a monopoly can control price and market, cheetah and gazelle take over small firms, copying products amazon basics putting other companies out of business, lost money for so long which can disincentivized other groups, cant be easily replicated
• Is Amazon good or bad for innovations/ startups

  1. Good: can sell small quantities allowing a pathway for small business, offers an avenue for a smaller business
  2. Bad: outside of Amazon small business are going out of business, harder for small business vendors on Amazon to compete with Amazon itself, gazelle and cheetah
• Should Amazon continue with their international operations. Why?

  1. Yes: cross subsidized wait to see if they do better. still at loss stage like NA, also now loosing less, bigger footprint brand name, if sustain loss can become bigger, still bringing in sales internationally, NA market is saturated. rise in oil prices delivering was temporary
  2. NO: learn from target, amazon failed in China, there are already established competitors internationally, WTO more trade restrictions